WHITE P APER
The Network-Enabled Enterprise: Strategic Considerations
Sponsored by: Level 3 Communications and Alcatel-Lucent
Melanie Posey
August 2013
Global Headquarters: 5 Speen Street Framingham, MA 01701 USA
P.508.872.8200
F.508.935.4015
www.idc.com
EXECUTIVE SUMMARY
The digital economy is no longer emerging; it has arrived. The changing nature
and velocity of business, the pace of technology innovation, and enterprise IT
transformation trends are converging to raise the profile of the network-enabled
enterprise. In this new era of highly interdependent business processes, applications,
and supply chains, wide area networks (WANs) take on greater importance as the
unifying, performance-enhancing element supporting today's technology-dependent
business environments. This new era of the network-enabled enterprise brings
heightened efficiency and productivity for business operations, but only if corporate
WANs are sufficiently dynamic, responsive, and performance oriented to meet the
needs of real-time business.
ENTERPRISE WAN TRANS FORMATION:
SUPPORTING HYBRID IT/NETWORK
ENVIRONMENTS
Today's enterprise networks must handle more requirements than ever before — but
the cost of failure is also greater than it has ever been in the past — and the network
lies at the heart of connecting business-critical applications to business growth.
In rapidly changing business environments, companies must constantly plan,
implement, and execute strategies to grow revenue, improve operational efficiencies,
and reduce costs. The technology landscape in which companies operate is becoming
more complex. IT initiatives such as datacenter consolidation, IT infrastructure
virtualization, and automated, interconnected business process architectures are being
implemented. At the same time, emerging applications such as cloud computing, unified
communications (UC), video, mobile applications, Big Data, the Internet of Things, bring
your own device (BYOD), and social media are being adopted both inside and outside
enterprise datacenters. Furthermore, the nature of work is changing as employees and
business locations are more dispersed and business ecosystems are expanding to
include suppliers, partners, and customers.
As shown in Figures 1 and 2, business initiatives drive IT investment and vice versa.
Enterprises are looking to cloud services, simplified network structures, virtualization, and
application performance technologies to reduce overall corporate costs. Mobility, UC,
and cloud services are being enlisted to improve employee productivity. Enhanced data
backup/recovery capabilities and WAN security are key network/IT initiatives related to
improved business processes and expanded use of Big Data applications. Figure 3
highlights current and planned use of emerging technologies among U.S. enterprises.
FIGURE 1
Key Business Initiatives Driving Network/IT Investment over
the Next 12 Months
Q.
Of the following business initiatives, which are the top 3 that will be significant in driving network
and IT investments in your organization over the next 12 months? Select up to three items.
Improve business processes
49
Reduce overall cost structure
48
Increase employee productivity
46
Expand use of business
intelligence/data analytics
29
Update business applications
28
Attract new customers
22
New product/service development
21
Customer retention
19
Expand into new
geographies/countries
13
0
10
20
30
40
(% of respondents)
50
60
n = 1,212
Notes:
Multiple responses were allowed.
Values represent the percentage of respondents ranking each factor number 1, 2, or 3.
Source: IDC's 2012 U.S. WAN Manager Survey
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FIGURE 2
Key Technology Initiatives Currently Driving Business Investment
Q.
Of the following technology initiatives, which three are the most important to your
organization at the moment?
Enhance WAN/network security
41
Improve data backup/recovery capabilities
38
Improve perf ormance of business apps
37
Implement a corporate mobile strategy
27
Implement/expand use of cloud services
27
Simplif y WAN/network structure
26
Server/datacenter virtualization
22
Deploy unif ied communications and
collaboration (UC&C)
19
Converge voice and data networks onto IP
15
Enable enterprise social networking
9
Put video over the WAN
9
0
5
10
15 20 25 30
(% of respondents)
35
40
45
n = 1,212
Notes:
Multiple responses were allowed.
Values represent the percentage of respondents ranking each factor number 1, 2, or 3.
Source: IDC's 2012 U.S. WAN Manager Survey
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FIGURE 3
Current and Emerging Technology Implementation
Q.
Are you implementing or do you plan to implement any of the following services or technologies?
31
Unif ied communications
25
Cloud computing used f or IT
inf rastructure (IaaS)
21
27
Cloud computing used f or sof tware
applications (SaaS)
26
27
41
Videoconf erencing solutions
20
18
Managed mobility
23
0
10
20
30
40
(% of respondents)
50
Use now
Plan to use in 12 months
n = 1,212
Source: IDC's 2012 U.S. WAN Manager Survey
These trends — IT transformation, emerging applications, new technology
consumption/delivery models, and highly distributed business ecosystems — result in
more traffic running on enterprise WANs, added pressure on the network, and a
greater need for network optimization and security solutions. The network-related
challenges of technology transformation include the following:
 Datacenter consolidation, IT virtualization, Big Data/analytics, business
continuity/data replication, and virtual machine portability. These initiatives
require bigger and more intelligent "east-west" (datacenter-to-datacenter)
bandwidth to handle the volume of the traffic flow and the business criticality of
the data and applications.
 Increasingly distributed end users. End users include not only employees in
remote offices with wired connections but also on-the-go mobile device users
and machine-to-machine "users" who require access to increasingly centralized
business applications on-net and off-net (i.e., cloud); "north-south" (datacenterto-branch office) connectivity must keep pace.
 Real-time, IP-enabled communications and processes. Real-time
applications such as voice and video and business-critical applications such as
point-of-sale or financial transactions compete for bandwidth on converged
networks alongside less critical or delay-sensitive traffic streams.
 Cloud computing. End-user consumption of external cloud services (whether IT
sanctioned or "shadow IT") creates data protection issues as well as identity
access, policy management, and quality-of-service (QoS) issues on the network.
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Modern enterprise networks are highly heterogeneous, featuring complex combinations
of the following:
 IT/application sourcing strategies: In-house, third-party colocation, managed
hosting, IT outsourcing, and external cloud services
 Application performance requirements: Latency and packet loss tolerances,
bandwidth needs, and routing imperatives
 Connectivity types: LAN, WAN, and public Internet; fixed and mobile access
 End-user devices: Desktops, laptops, smartphones, tablets, wireless terminals,
and sensors
 End-user communities: Employees, customers, partners, and suppliers
Highly reliable, secure, and performance-optimized WANs become increasingly
important components of enterprise ICT strategies as mission-critical business
processes and applications become more network dependent. Adoption of a holistic
view that positions IT and networks as interdependent components of next-generation
IT/application delivery frameworks is the first step toward becoming a networkenabled enterprise.
NEXT-GENERATION APPLICATION -AW ARE
DELIVERY NETWORKS: RELIABILITY,
PERFORMANCE, AND SEC URITY
The expectations of end users who rely on the network to deliver business-critical
applications and communications have expanded dramatically in recent years. Inside
the network-enabled enterprise, data streams are not just bits and bytes: They are
purchase orders, invoices, design specifications, online transactions, and customer
service interactions that must flow across the network reliably, securely, and in real
time. Network issues that impede access to these applications can translate into
diminished employee productivity, disrupted production schedules, lost sales, and
customer/line-of-business user dissatisfaction.
Security also takes on heightened importance in interconnected business
environments. Organizations must protect against targeted Web site attacks, maintain
strict controls for access to business-to-business (B2B) and corporate portals, and
comply with regulatory mandates related to data protection and information security.
Ensuring network reliability and security was difficult enough back when business
processes operated within the confines of corporate LANs and private WANs. In nextgeneration enterprise application delivery environments, workloads and application
components no longer reside exclusively within the controlled confines of enterprise
datacenters and closed corporate networks. Furthermore, convergence in the
datacenter, LAN/WAN, and network access domains as well as growing use of
externally sourced PaaS, IaaS, and SaaS services ups the ante for network/IT
managers who must supply the bandwidth needed to support processing- and
storage-intensive workloads and manage the network traffic flows generated by an
ever-shifting mix of applications and end users.
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Converged environments require dynamic networks designed to adjust to different
application-centric and end user– or device-specific requirements. Not all networkenabled applications are created equal — some are more mission critical, latency
sensitive, or bandwidth hungry than others — but all must be network enabled to
provide consistent, predictable performance.
The first step in building a next-generation application-aware network involves optimal
leverage of the various network technologies. The inherent traffic engineering and
class-of-service (CoS) capabilities of MPLS-enabled Layer 2 and Layer 3 VPNs
facilitate assigning different priorities to different types of network traffic and the ability
to dynamically allocate bandwidth among the different CoS designations. Other MPLS
attributes, scalability, route management, and any-to-any connectivity position
MPLS for use in site-to-site VPNs and converged voice/data/video applications. For
some applications, the ubiquity of public IP provides solutions for remote access,
large file transfer, and public cloud gateways. Finally, high-performance optical
networks provide dedicated large-bandwidth connectivity, low point-to-point latency,
and reliability for applications such as datacenter-to-datacenter interconnection,
data/storage replication, high-speed transactions (such as algorithmic trading), and
business analytics/data mining.
However, other tools and techniques are required to fine-tune network traffic flows
and optimize applications for network delivery. These tools, collectively grouped under
the name WAN optimization, attack performance issues at the data layer (caching,
compression, deduplication), the application layer (optimization to overcome the
chattiness of certain application protocols), and the transport layer (traffic optimization
across multiple transport protocols). Application performance management, a key
capability of next-generation WANs, provides a framework for fine-grained network
traffic profiling and control, and it enables the visibility and intelligence needed
to establish performance thresholds, implement proactive network planning strategies,
and make informed network-tuning adjustments. Ongoing initiatives such as
software-defined networks (SDNs) and network function virtualization (NFV) will
introduce additional traffic management, quality-of-service, and tuning capabilities.
CASE STUDIES: WHAT C AN
HIGH-PERFORMANCE CONVERGE D
NETWORKS DO FOR YOU?
High-performance, scalable, and secure WAN environments provide consistent,
reliable, and optimized access to a wide range of horizontal business applications
such as email, content management, and file storage, which, depending on the
industry, may or may not be mission critical. However, across all industries, there are
certain business processes in which the speed, reliability, and responsiveness of the
network can literally mean the difference between profit and loss, customer retention
or churn, and successful or unsuccessful patient outcomes. Examples include:
 Financial services. High-speed algorithmic trading firms rely on highperformance optical connectivity for linkages to the broad array of ecosystem
participants involved in trade execution, including liquidity and execution venues,
market data providers, and clearinghouses/settlement houses. In the world of
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electronic and increasingly automated trading, reliable, high-capacity, and
scalable connectivity is a table-stakes requirement for accessing large volumes
of data identifying price arbitrage opportunities and executing the trade in the
space of milliseconds before the opportunity vanishes. Delays or variable latency
at any point in the trading workflow are the make-or-break difference between a
winning or losing day in the market.
 Healthcare. The healthcare industry is in the midst of digital transformation as
electronic medical record exchanges, point-of-care information systems, remote
diagnostics, medical monitoring devices, and other innovations converge to
facilitate "connected healthcare." Hospitals and non-hospital care facilities,
healthcare providers, insurance companies, medical device manufacturers, and
the life science industry are collaborating to make the delivery of healthcare
services more efficient while also containing costs. Scalable networks that can
expand rapidly to connect additional locations and end-user devices are vital to
the expansion of connected healthcare ecosystems. As more medical information
is captured, stored, and exchanged electronically, identity access management
and layered security to protect data in flight and at rest are required for regulatory
compliance and to promote the use of telemedicine and mobility-based
healthcare services. Remote diagnostics for chronic disease management is
another healthcare application that requires reliable and secure access and
distribution network services.
 Media and entertainment. Distributed digital workflows for content creation and
sourcing, media capture, pre- and post-production, ad insertion, and content
distribution are mission-critical elements of media/entertainment companies'
supply chains. If the content does not get to where it needs to be, the content
owners, aggregators, distributors, and advertisers all take a hit. As media
migrates to the Internet, digital media subscription services risk alienating their
advertisers and losing paying customers, given that alternative sources of
content are only a click away.
MAN AGING NEXT -GENERATION NETWORKS:
CONSIDERING THE OPTIONS
Visibility is a necessary prerequisite for guaranteeing the performance of networkcentric applications, but network/IT managers often don't know what applications are
running on the network. Nor is there widespread awareness of how the applications
impact the broader network and end-user environments — what the bandwidth
requirements are, when new applications are added, how applications interact with
each other, and how business processes powered by applications perform on a
day-to-day basis. However, without baseline knowledge of traffic flows, usage
profiles, and application dependencies, it's impossible to get at the root causes of
network performance problems and implement targeted solutions.
Intelligence gathering about the applications running on the network and the associated
resource utilization levels can be used to benchmark the traffic flows and categorize
them based on business criticality or application characteristics as well as establish
application-specific performance metrics (delay, packet loss, etc.). This discovery
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process also has a security dimension. Visibility plays an important role in identifying
unauthorized applications and users on the network and feeding into policies that
establish parameters on acceptable use of corporate network resources and isolating
potentially malicious traffic. Network access and control policies inform the security
measures, which must be integrated into performance-optimized network management.
Performance and security are not mutually exclusive network management objectives.
When combined with WAN optimization techniques, security measures and policy
controls accelerate productive processes and applications in a manner consistent with
business requirements.
The WAN optimization tool box provides a variety of levers for fine-tuning network
performance: CoS designations, traffic-shaping policies, application prioritization, dynamic
bandwidth allocation, and protocol optimization. Correlation of application/process metrics
to network resources enables real-time problem detection and resolution. Ongoing
monitoring yields trending data that can be applied to remediation of recurring issues;
development of proactive, fact-based capacity planning; and setting of performance
baselines that can be translated into service-level agreement (SLA) metrics.
As networks take on a higher profile in enabling the optimized delivery of enterprise
applications and cloud-based solutions, internal network/IT personnel are feeling the
pinch. Large companies with the resources to support in-house staff, expertise, and
centralized network management systems may be able to undertake comprehensive
network management without too much difficulty. However, emerging technologies
and the pace of enterprise IT transformation may require a fundamental reworking of
the network architecture, which current staff may be not be in a position to undertake.
For smaller companies, DIY network design and optimization are typically not options
on the table. Businesses of all sizes must balance the increasing cost and effort
involved in network enabling the enterprise against other business functions that also
require time, resources, personnel, and management attention.
A network solutions partner can help ease the strain. Specific benefits of the network
partner approach include the following:
 Sharpened focus on the core business. IT staff in today's enterprises have
multiple responsibilities across the networking, IT, and application domains,
serving the needs of both individual end users and operational line-of-business
units. By working with a network solutions partner, companies can focus (or
refocus) on core business priorities, freeing up internal staff to concentrate on
managing the application layer, improving existing business processes, and
developing new processes that will run even more efficiently on applicationaware networks.
 Expertise on-demand. Enterprises can tap into their network solution partner's
engineering expertise to design finely tuned networks that leverage the latest
WAN optimization and application performance management technology and
monitoring capabilities. Leveraging the network solution partner for access to the
various tools and techniques for network visibility, optimization, and control
facilitates a more systematic approach to the increasingly taxing problem of
delivering optimized application performance on the network.
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 Positive impact on business operations. Network solutions partners can help
companies establish standardized network management processes and best
practices for all business locations, ensuring consistent application performance
across the organization.
 Cost control. Running a next-generation application-aware network can be a
constant process of moves, adds, changes, and upgrades across the extended
enterprise environment. Working closely with a network solutions partner offers
enterprises more predictable cost structures made possible through the service
provider's economies of scale and dedicated, specialized resources.
 Agility. As enterprises adopt new business processes at an unprecedented
pace, the systems supporting these processes and the business analytics driving
operational changes need to evolve just as quickly. A network solutions partner
businesses build flexible networks suited to the requirements of the digital
economy and provide the professional services resources needed to power the
network-enabled enterprise.
NETWORK SOLUTIONS PROVIDER
SELECTION: KEY DECISION FACTORS
The network-enabled enterprise offers a solid foundation for companies looking at
technology-driven ways to operate more cost efficiently, improve business processes,
increase business productivity, and enhance communication and collaboration
throughout the supply chain. Going forward, corporate network/IT departments will be
tasked with the procurement, operation, management, and coordination of
heterogeneous, application-aware network environments that must meet a diverse
array of internal and external business requirements. Next-generation networks,
positioned as the federation engine of dynamic IT, play an increasingly important role
in delivering high-quality end-user experiences with optimal performance and security
for mission-critical business applications. The right network solutions provider can
help make the network-enabled enterprise a reality.
When evaluating solution providers, buyers should keep in mind the usual selection
factors such as industry reputation and growth trajectory, as well as the following:
 Network reach, density, and penetration. Global access and transport
capabilities, national inter-city route diversity, international/inter-regional
connectivity, and broad and deep metro area coverage
 Flexible WAN solutions portfolio. Support for various QoS, performance,
reliability, capacity, security, and cost requirements, depending on application
and end-user profiles
 Application performance management solutions. Network/application visibility;
assessment and discovery tools; performance monitoring, troubleshooting, and
analysis capabilities; and application-level SLAs
 Network architecture. Edge router density, metro fiber coverage, off-net local
loop minimization, and route efficiency
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 Cloud ecosystem interconnection. Peering, NNI, and Internet transit
relationships with key cloud service providers
 Dynamic bandwidth options. On-demand burstable capacity and usage-based
pricing options
 On-net cloud applications road map. "Beyond connectivity" business-enabling
services such as voice over IP, IP-enabled contact centers, videoconferencing,
unified communications, Web site acceleration, content delivery, and content
management
 Network consulting and design services. Professional services–oriented
engineering resources that can help enterprises design networks customized to
their mission-critical application requirements and optimized to eliminate the
network-related issues that can adversely impact application performance
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